Document Content

DECREE

Providing for compensation for damage caused by unlawful strikes to employers

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the June 23, 1994 Labor Code; the November 29, 2006 Law Amending and Supplementing a Number of Articles of the Labor Code;

At the proposal of the Minister of Labor, War Invalids and Social Affairs,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- Scope of governing

This Decree provides for responsibilities, levels and forms of compensation for organizations and individuals involved in strikes which are declared unlawful by People's Courts under Clause 1, Article 179 of the Labor Code, which was amended under the November 29, 2006 Law Amending and Supplementing a Number of Articles of the Labor Code (below referred to as the Labor Code for short).

Compensation for property damage to employers under Clause 2, Article 179 of the Labor Code complies with the Civil Code's provisions on compensation for damage outside contract.

Article 2.- Subjects of application

1. Trade union organizations, labor collective representatives and laborers involved in strikes declared unlawful by People's Courts and causing damage to employers.

2. Employers.

Article 3.- Compensation principles

1. Damage must be compensated fully and promptly at request.

2. Levels of compensation shall be determined based on actual material damage.

3. To respect and encourage the right to self-decision of parties.

4. To ensure the lawful rights and interests of employers and employees to maintain and develop labor relations in enterprises.

5. Compensation can be made in cash, in kind or by performance of a work.

Chapter II

PROVISIONS ON COMPENSATION

Article 4.- Compensation responsibilities

1. Grassroots trade unions leading strikes declared unlawful by a People's Court and causing damage to employers shall compensate for such damage.

2. When a strike led by labor collective representatives is declared unlawful by a People's Court and causes damage, representatives designated by labor collectives and employees participating in the strike shall take personal responsibility for sharing the obligation of compensating employers for damage.

Article 5.- Compensation request

1. Employers may request trade union organizations prescribed in Clause 1, Article 4 of this Decree or labor collective representatives and employees participating in strikes specified in Clause 2, Article 4 of this Decree to compensate for damage caused by unlawful strikes. The time limit for request is one year from the effective date of a court's decision on the unlawfulness of a strike.

2. A compensation request shall be made in writing, covering the following major contents:

a/ Value of damage and proof of this value;

b/ Level of compensation;

c/ Mode of compensation;

d/ Time for compensation.

3. The written compensation request and related documents shall be sent to the trade union organization or labor collective representatives that lead the strike, and simultaneously to the Labor, War Invalid and Social Affair Service and the Labor Federation of the province or centrally run city where the strike takes place.

Article 6.- Determination of damage for compensation

Damage caused by an unlawful strike includes corporate assets which are lost directly due to suspension of production and business caused by the strike. When the two parties fail to reach agreement on the value of damage, they may request an intermediary organization to value the damage. Valuation expenses shall be paid by the party requesting the valuation.

Article 7.- Requested level of compensation

The requested level of compensation shall be determined based on the determination of damage prescribed in Article 6 of this Decree. The maximum level of compensation must not exceed three (03) consecutive months' wage or pay received by employees going on strike under labor contracts before the date of a strike.

Article 8.- Negotiation on levels of compensation at enterprises

1. Within 10 days from the date of receiving a compensation request, representatives of grassroots trade union standing committees or labor collective representatives may request employers to negotiate on compensation.

2. A negotiation request shall be made in writing, clearly specifying the time and venue for negotiation and shall be sent to the employer, provincial-level Labor, War Invalid and Social Affair Service and Labor Federation.

3. Within three (03) days from the date of receiving a negotiation request, the employer shall hold a meeting to negotiate with representatives of the trade union standing committee or labor collective representatives. When it is impossible to conduct a negotiation yet, the employer shall issue a written reply clearly stating the reason and setting the time for another negotiation.

4. The two parties may invite representatives of the labor state management agency, local trade union organization and local employers to attend a negotiation meeting. All contents of this meeting shall be recorded in minutes.

5. When reaching agreement on the level and mode of compensation, the two parties shall observe them, unless otherwise agreed upon. The negotiation meeting minutes serve as a legal basis for determining rights and obligations of involved parties responsible for compensation.

Article 9.- Suing for damages

An employer may initiate a lawsuit for damages at the district-level People's Court of the locality where a strike takes place in the following cases:

1. Employee representatives refuse to negotiate;

2. Negotiation fails;

3. The party liable to pay compensation fails to fulfill its commitments.

Article 10.- Compensation

1. When the grassroots trade union organization having led a strike declared unlawful by a People's Court is obliged to compensate the employer for damage, the funds for compensation shall be taken from assets of the trade union organization under the guidance of the Ministry of Finance.

2. When labor collective representatives have led a strike declared unlawful by a People's Court, these representatives and employees going on strike shall share the responsibility for damage caused to employers.

Employees going on strike shall compensate for damage by having their monthly salary or pay deducted. The maximum deduction each time must not exceed 30% of employees' monthly wage or pay under labor contracts.

When an employee terminates the labor relation before fulfilling his/her compensation obligation, the remaining amount to be compensated shall be considered a debt of the employee to the employer.

Chapter II

IMPLEMENTATION PROVISIONS

Article 11.- Implementation effect

This Decree takes effect 15 days after its publication in "CONG BAO."

Article 12.- Guidance and implementation responsibilities

1. The Ministry of Labor, War Invalids and Social Affairs shall coordinate with concerned agencies and organizations in guiding the implementation of this Decree.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, presidents of provincial/municipal People's Committees, and concerned agencies, organizations and individuals shall implement this Decree.